Supporting welsh business

The budget for economic development within the National Assembly (and the grants that follow) pales into insignificance when compared to the £4 billion (or 11 per cent of GDP) that the public sector spends annually on purchasing goods and services in Wales.

As in the case of giving grants to large foreign investors, our civil servants and public agency executives seem to be more impressed with suits from over the border than in the abilities and capabilities of Welsh firms. As a result, we are losing out on a crucial opportunity to use public funding to build up high value added businesses and industries within Wales. Only 30 per cent of the goods and services procured by the Welsh public sector goes to local firms.

Imagine if we could increase that to 50 per cent – that would mean that at least £800 million of additional funding per annum would go into the Welsh private sector, dwarfing the £30 million given in RSA and AIG grants to Welsh firms last year.

The public sector will no doubt argue that they are bound by European regulations, that they have to consider ‘best value’ for taxpayers and that they cannot be anti-competitive. However, it amazes me whilst we seem to be bound to play by the rules, it doesn’t stop other countries making sure that it is their home companies – employing local people and spending money within their region - that get a first stab at public contracts.

In the United States of America, there have been countless efforts within various agriculturally-dependent areas to encourage individuals to support their local communities through buying local produce. Indeed, ten US states have even passed laws requiring that schools, prisons, and other state institutions buy a percentage of food from local farmers.

If Welsh companies do not reach the quality threshold, then they should not qualify for the contracts, but it seems to me that every day Welsh companies lose out because, for some reason, companies from any other region are perceived as quality whilst our prophets are definitely not welcome in their own country.

The key to Welsh economic prosperity is to use our own resources to build capacity for the future through supporting our local businesses to grow and develop. Getting contracts to these Welsh firms should be the first priority of our economic development bodies. It is irrelevant whether this is done through raising the quality of our suppliers or through adopting criteria which take into account the impact of giving such contracts to local firms in terms of employment, wealth and potential for growth. In the state this nation is currently in, we cannot afford the luxury of not maximising the use of public funds in supporting local firms.

One small contract may not seem much to civil servants but it can mean the difference between survival and closure for many small firms.

Popular posts from this blog

THE IMPORTANCE OF FRANCHISING

THE IMPORTANT IMPACT OF STARTUPS ON THE WELSH ECONOMY

UNIVERSITIES NEED TO BE AT THE HEART OF THE ECONOMIC RENAISSANCE OF THE WELSH ECONOMY